Article 155 A securities registration and clearing institution is a non-profit legal person that provides centralized registration, custody and settlement services for securities transactions. The establishment of a securities registration and clearing institution shall be subject to the approval of the securities regulatory authority under the State Council.

Article 156 The establishment of a securities registration and clearing institution shall fulfill the following requirements: (1) Its self-owned capital shall be no less than 0.2 billion yuan; (2) It shall have a place and facilities as required by the services of securities registration, custody and settlement; (3) Its major managers and practitioners shall have the securities practice qualification; and (4) It shall meet any other requirement as prescribed by the securities regulatory authority under the State Council. The words "securities registration and clearing" shall be indicated in the name of a securities registration and clearing institution.

Article 157 A securities registration and clearing institution shall perform the following functions: (1) The establishment of securities accounts and settlement accounts; (2) The custody and transfer of securities; (3) The registration of roster of securities holders; (4) The settlement and delivery for listed securities trading of a stock exchange; (5) The distribution of securities rights and interests on the basis of the entrustment of issuers; (6) The handling of any inquiry relating to the aforesaid business operation; and (7) Any other business operation as approved by the securities regulatory authority under the State Council.

Article 158 A national centralized and unified operation shall be adopted for the registration and settlement of securities. The constitution and operational rules of a securities registration and clearing institution shall be formulated according to law and shall be subject to the approval of the securities regulatory authority under the State Council.

Article 159 The securities as held by the relevant holders shall be all put under the custody of a securities registration and clearing institution in a listed trading. A securities registration and clearing institution may not misuse any securities of its clients.

Article 160 A securities registration and clearing institution shall provide the roster of securities holders as well as the relevant materials to a securities issuer. A securities registration and clearing institution shall, according to the result of securities registration and settlement, affirm the fact that a securities holder holds the relevant securities and provide the relevant registration materials to a securities holder. A securities registration and clearing institution shall guarantee the authenticity, accuracy and integrity of the roster of securities holders as well as records of transfer registration and may not conceal, forge, alter or damage any of the aforesaid materials.

Article 161 A securities registration and clearing institution shall take the following measures to guarantee a sound operation of its business: (1) Having the necessary service equipment and complete data protection measures; (2) Having established complete management systems concerning operation, finance and security protection; and (3) Having established a complete risk management system.

Article 162 A securities registration and clearing institution shall keep the original voucher of registration, custody and settlement as well as the relevant documents and materials in a proper manner. The term for keeping the aforesaid materials shall be no less than 20 years.

Article 163 A securities registration and clearing institution shall establish a clearing risk fund so as to pay in advance or make up any loss of the securities registration and clearing institution as incurred from default delivery, technical malfunction, operational fault or force majeure. The securities clearing risk fund shall be withdrawn from the business incomes and proceeds of a securities registration and clearing institution and may be paid by clearing participants according to a specified percentage of securities trading volume. The measures for raising and managing the securities clearing risk fund shall be formulated by the securities regulatory authority under the State Council in collaboration with the fiscal department of the State Council.

Article 164 The securities clearing risk fund shall be deposited into a special account of a designated bank and shall be subject to special management. Where a securities registration and clearing institution makes any compensation by using the securities clearing risk fund, it may recourse the payment to the relevant person as held responsible.

Article 165 An application for dissolving a securities registration and clearing institution shall be subject to the approval of the securities regulatory authority under the State Council.

Article 166 An investor who entrusts a securities company to undertake any securities trading shall apply for opening a securities account. A securities registration and clearing institution shall, according to the relevant provisions, open a securities account for an investor in his own name. An investor who applies for opening an account shall hold the legitimate certificates certifying his identity of a Chinese citizen or its qualification of a Chinese legal person, unless it is otherwise provided for by the state.

Article 167 A securities registration and clearing institution shall, when providing the netting service for a stock exchange, require the relevant clearing participant to deliver securities and funds in full amount and provide the guaranty of delivery according to the principles of delivery versus payment (DVP). Before a delivery is concluded, nobody may use the securities, funds or collaterals as involved in the delivery. Where a clearing participant fails to perform the duty of delivery according to the schedule, a securities registration and clearing institution has the right to dispose the properties as prescribed in the preceding paragraph herein according to the operational rules.

Article 168 The clearing funds and securities as collected by a securities registration and clearing institution according to the operational rules shall be deposited into a special account for settlement and delivery. The settlement and delivery that can only be applied to the securities trading as concluded according to the operational rules may not be enforced compulsorily.[First][Previous][Next][Last]